Struggling Housing Market Means Lower Rates

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Refinancing your home in this housing market is a tricky endeavor. You want to get the best deal and save the most money, but your home isn't bringing in the same appraisal as it once did. The government is putting plans into action to help homeowners who are finding themselves upside-down in their homes. Interest rates have dropped in an effort to boost the housing market.

Previous generations of home buyers have accepted rates ranging from 6% to 18%, and sometimes even higher. Rates are often ranging now from 3.5% to 5.0% depending on the term of loan you choose. The last time rates were this low was between World War I and II! The new interest rate numbers have owners looking and wanting to refinance to take advantage of this extraordinary opportunity.

While not very many homeowners still boast an interest rate above 9%, there are many still out there in the 6's and 7's. And many of them are veterans. The better news for veterans is that the VA is offering a VA Streamline refinance that allows for flexible terms and interest rates.

Let's see an example of savings by utilizing a lower interest rate. Let's say a homeowner, with a $100,000 home with a 7% interest rate in a 30 year loan is interested in refinancing. At this point they are paying $665.30 in principal and interest. If they refinance at 5%, they are paying $536.82, thereby saving $128.48 each month! That is a couple of utility bills! However, if they are interested in paying off their home sooner, and look at refinancing into a 15 year loan, they will get an even lower interest rate, let's go with 4% and then wind up paying more towards principal each month, thereby building up equity faster.

This is an excellent option for those not planning on staying in their home forever, or wanting to fast track saving for retirement or other long-term saving options. So in all, they will end up paying $739.69 each month, only 30% more each month than a 30 year loan. Keep in mind that these interest rates are constantly changing, and these are just examples of what could happen. Your savings could be more or the same. The numbers speak for themselves.

You know your budget, your future plans and the goals you have set for yourself. That is why contacting a lender is essential to help you sort through all the number crunching and information. Unfortunately, the interest rates cannot stay this low for long. If this is something that you might be interested in, you need to take action today and not miss out on this opportunity!